DCIT-3(2)(1), AAYKAR BHAWAN vs. MARSHALL PRODUCE BROKERS COMPANY PVT LTD, NARIMAN POINT
Income Tax Appellate Tribunal, MUMBAI BENCH “D” MUMBAI
Before: SHRI OM PRAKASH KANT () & SHRI SUNIL KUMAR SINGH ()
KANT, AM appeals by the assessee for a -18 and cross appeal of th
17-18 have been preferred again
2.08.2024, passed by the Ld. C
) – National Faceless Appeal C
’]. As common issues in dispute fore, same were heard together a lidated order for sake of conven up the appeal of the assessee rounds raised by the assessee i
:
d Commissioner of Income-tax (Appeals) ("CIT addition of Rs. 1,69,14,269/- being the dif pts as determined under the cash system f d that as determined under the mercan without appreciating the fact that the mployed cash system of accounting for d me.
erred in not deleting the addition of Rs. 1,28,3
in the interest income offered to tax under th urces as determined under the cash system f that as per the mercantile system of acco he fact that the appellant has consistently unting for determining its business income.
judice to grounds 1 and 2, the CIT(A) erred ce the income of the appropriate year in whic uce Brokers Company Pvt.
Ltd.,
2
, 5092 & 4918/MUM/2024
assessment year he Revenue for nst two separate
Commissioner of Centre, Delhi [in e are involved in and disposed off nience and avoid for assessment in its appeal are T(A)) erred in not fference in the followed by the ntile system of appellant has determining its 38,105/ - being he head Income followed by the ounting without employed cash in not directing ch the aforesaid sums are offer double taxation
4. The CIT(A) e the AO while c under section already determ accounting for again results in 5. The CIT(A) e on the office pr the purposes o appreciating th which deprecia be denied in th
6. The CIT(A) income of Rs. 2
Andheri office p used by the Ap
7. The CIT(A) e rental income
Andheri premis been offered to The CIT(A) err respect of soci respect of its of 9. The CIT(A) e business prom appreciating th
Appellant's bus
3. Briefly stated, fa engaged in earning b for vessels/tankers clients like Shipping
Bharat
Petroleum
Corporation Ltd. etc year under con
Marshall Produ
ITA Nos. 4917, red to tax by the Appellant on cash basis n of the same sums.
rred in not deleting the addition of Rs. 2,97,7
computing income for the purposes of minimu
115JB without appreciating the fact the mined its book profits based on mercan the purposes of section 115JB and makin n double taxation.
erred in not upholding the appellant's claim f remises at Andheri to the extent the premises of the appellant's business. The CIT(A) furth hat once the asset has entered into the bloc ation has been allowed in the first year, depr he subsequent years.
erred in upholding the addition of deemed
26,94,240 made by the AO in respect of the 6
premises without appreciating that the said ppellant for the purposes of its business.
rred in upholding the addition of Rs. 19,000 i received by the appellant for the let out ses without appreciating that the said amou o tax in the subsequent year.
red in not deleting the disallowance made iety charges and property taxes paid by th ffice premises at Mumbai and Delhi.
erred in not deleting the disallowance made motion expenses aggregating to Rs. 1,51, hat the said expenses were incurred for the siness.
acts of the case are that the ass brokerage income by way of ar sailing in international wate g corporation of India, Indian O
Corporation
Ltd.,
Hindust c. The assessee filed return of nsideration declaring total uce Brokers Company Pvt.
Ltd.,
3
, 5092 & 4918/MUM/2024
so as to avoid
71,374 made by um alternate tax appellant has ntile system of ng an addition for depreciation s were used for her erred in not ck of assets on reciation cannot notional rental
60 percent of the premises were in respect of the portion of the unt had already by the AO in he appellant in e by the AO of ,740/- without purpose of the sessee is mainly rranging charter ers for various
Oil Corporation, tan
Petroleum income for the income at Rs.25,43,57,419/- u
Act, 1961 (in short ‘t u/s 115JB of the I
23.09.2016. The retu for scrutiny assessm issued and complied of the Act on 22.1
additions/disallowan the Ld. CIT(A) partly additions sustained before the Income-ta raising the grounds a 4. Before us, the L containing pages 1 to 5. The ground Nos addition made in re and interest receipt
Assessing Officer, the system of accounting tax purposes and followed consistently
Department. As per t basis of accounting
Marshall Produ
ITA Nos. 4917, under the normal provisions of the Act’) and Rs.25,28,55,778/-
Income-tax Act, 1961 (in shor urn of income filed by the assess ment and statutory notices und with. In the assessment compl
2.2018, the Assessing Officer nces to the returned income. On y sustained the additions. Agg by the Ld. CIT(A), the assess ax Appellate Tribunal (in short as reproduced above.
Ld. Counsel for the assessee file o 129. s. 1 to 3 of the appeal of the as spect of business receipt of R of Rs.1,28,38,105/- respectiv e assessee submitted that it wa g for declaring its business inco said cash system of account y in the past and accepted by the profit and loss account main for income-tax purposes, the a uce Brokers Company Pvt.
Ltd.,
4
, 5092 & 4918/MUM/2024
the Income-tax
- as book profit rt ‘the Act’) on see was selected der the Act were leted u/s 143(3) r made various n further appeal, grieved with the see is in appeal t ‘the Tribunal’) ed a Paper Book ssessee relate to Rs.1,69,14,269/- vely. Before the s following cash ome for income- ting was being the Income-tax ntained on cash assessee shown brokerage income of and profit before tax that it also maintain mercantile system of the brokerage incom
Rs.12,27,005/- and shown. The relevant assessee for year u mercantile system o
Assessing Officer in reference, the said ch
Particulars of Income
Receipts
Mercantil
System (R
Brokerage
31027070
Interest
40655616
Rent
2138500
Exchange Gain
1227005
Total
5.1 The Assessing O amounting to Rs.1,5
gain of Rs.12,27,0
Rs.1,69,14,269/- as of the Act. Similarly, interest income of R other sources’. Befor
Marshall Produ
ITA Nos. 4917, f Rs.29,45,83,445/-, exchange x of Rs.25,28,55,778/-. The as ned a separate books of accoun f accounting for company Act p me of Rs.31,02,70,709/-, exc profit before tax at Rs.28,32
t chart of the various incomes under consideration as per all of accounting has been repr the impugned assessment or hart is reproduced as under:
as per le
Rs.)
Receipts as per alleged
Cash
System (Rs.)
Variation (Rs.
09
294583445
156872264
6
27817511
12838105
2119500
19000
0
1227005
29771374
Officer added the variation in br
56,87,264/- along with variatio
005/- and thus made tota business income under the no the AO made addition for the Rs.1,28,38,105/- under the hea re the Ld. CIT(A), the assessee uce Brokers Company Pvt.
Ltd.,
5
, 5092 & 4918/MUM/2024
gain of Rs. Nil ssessee claimed nts following the purposes, where change gain of 2,84,743/- was s shown by the leged cash and roduced by the rder. For ready
(Amount in Rs.)
)
Amount of Variation added to income head
Business Income
Other Sources
House Property
Business Income rokerage income on in exchange al addition of ormal provisions variation of the ad ‘Income from submitted that section 145(1) of the head ‘profit and gain sources’ to be compu regularly followed b following cash receip was no justification basis that too when of accounting. Befor receipt declared on also. The assessee submission of the as CIT(A) without giving to the tune of Rs.2,9
same was deferred t addition made by the well as to Income from 5.2 Before us, the L
Book page 13, which information in the accounting implied
Further, the Ld. C assessment order for on Paper Book page noted that the assess
Marshall Produ
ITA Nos. 4917,
Act provides for income charg ns business or profession’ or ‘inc uted in accordance with metho by the assessee and since the pt of accounting for past sever for adding the income as per expenses were allowed as per t e the Ld. CIT(A), the assessee cash basis might include adv relied on the various decision ssessee reproduced by the Ld.
g any explicit reasons, simply h
97,52,374/- was not offered to to subsequent years, therefore, e Assessing Officer, both to bus m other sources. .
Ld. Counsel for the assessee re h is part of return of income p said return of income where in the previous year is ment
Counsel for the assessee r r assessment year 2012-13, wh
65, wherein in para 4, the A see was following cash system o uce Brokers Company Pvt.
Ltd.,
6
, 5092 & 4918/MUM/2024
eable under the come from other d of accounting e assessee was ral years, there r the mercantile the cash system submitted that vances received ns cited in the CIT(A). The Ld.
held that receipt tax and rather
, he upheld the iness income as eferred to Paper rescribing other the method of tioned as cash.
eferred to the hich is available
Assessing Officer of accounting for income-tax purpose after year. The Ld. Co the Hon’ble Delhi Hig v. CIT reported in 33
Court in the case of U
ITR 355 (SC) and de case of Pradip Comm
(Calcutta).
5.3 On the other ha relied on the order of 5.4 We have heard carefully perused the issue under conside assessee should be c of accounting, which followed by the asses of the assessee, mat
On said date, the ld sheet and profit and have been maintain perusal of the Signif financial statements year involved, we
Marshall Produ
ITA Nos. 4917, and same had been consistent ounsel for the assessee relied on gh Court in the case of Cyber M
38 ITR 177 (Delhi), decision of H
United Commercial Bank v. CIT ecision of Hon’ble Calcutta Hig mercial (P.) Ltd. v. CIT reported and, the Ld. Departmental Rep f the lower authorities.
d the rival submissions of th e relevant material placed on re ration pertains to whether the computed in accordance with t h has been claimed to have be ssee over the years. For verificati tter was fixed for clarification o counsel for the assessee filed co d loss accounts for last three y ned as per cash method of a ficant Accounting and Notes to for all the three year including find that only Revenue and uce Brokers Company Pvt.
Ltd.,
7
, 5092 & 4918/MUM/2024
tly followed year n the decision of Media (India) Ltd.
Hon’ble Supreme reported in 240
gh Court in the in 344 ITR 171
resentative (DR) he parties and ecord. The main e income of the the cash system een consistently ion of this claim on 28/01/2025. opies of balance years claimed to accounting. On Account to the the assessment
Expenses are accounted on cash liabilities have been liabilities are not ha computed and offere
AO has rejected the substituted the inco opinion, the assesse recording revenue an items, which is evide ready reference relev under:
“10. During t question with Provisions ap along with th system of acc
11. In this reg a. The figure as at 31st M
2016 - 17) is items namely
Deposit rece employees co
438. b. The Appel items appear determination by the appella c. Tax provis presentation, shown as Pr
Marshall Produ
ITA Nos. 4917, basis. Similarly, in balance noted. The ld Counsel explai aving impact on the income o ed as per cash accounting. He e books of account of the ass ome as per mercantile metho e has followed cash method of nd expenses item only and not fo ent from the submission of the vant part of his submission is the hearing, the Hon'ble members had h respect to the item Current Liabilit ppearing in the Audited Balance Sheet he Profit & Loss account maintained as p counting.
gard, the appellant wishes to submit as u of provisions as appearing in the Balan
March 2016 (relevant for present appea
Rs. 31,88,94,438. The same comprises
, (i) tax provision of Rs. 31,86,44,000, (ii) ived from Licencee - Rs. 2,50,000
ntribution to ESIC collected from staff sal llant humbly submits that none of the ring in the balance sheet have any bea n of business income as per cash system ant.
sion of Rs. 31,86,44,000 - For the pu the tax liability for the balance sheet p rovision on Balance sheet date. Corres uce Brokers Company Pvt.
Ltd.,
8
, 5092 & 4918/MUM/2024
sheet, current ined that those of the assessee submitted that sessee and only od. But in our f accounting for or balance sheet ld Counsel. For s reproduced as raised a ties and tendered per cash under:
nce Sheet al for AY of three
Security and (iii) lary - Rs.
ese three aring for followed urpose of period is sponding effect is give
Profit / (Loss against the a & Advances i above presen respect to c accounting fo
In this regard at page 1 of 25,28,55,778
from Busines the Cash Prof prior to reduc for the year u for taxation i income compu d. Deposit re had rented p
Management of Rs. 2,50,0
Licencee whic time of vacati as a Curren submits that business inco the appellant.
e. Employees staff salary - contribution f balance sheet f. The Appell above items computed as appellant.
In light of the ground on co accounting reg
5.5 The section 145
mercantile system a Marshall Produ
ITA Nos. 4917, n in Profit & Loss account as a line it s) before Taxation. Tax paid from time above provision is reflected under the hea in balance sheet. The Appellant submits ntation of tax provision has no beari computation of income as per cash b llowed in accordance with section 145 of d, attention is drawn to the computation o the Paper book which refers to Net prof
8 as per P & L Account under the head ss & Profession' which is the figure appe ofit & Loss Account for financial year 20
ction of provision for taxation of Rs 8,90
under consideration. In other words, the p is not claimed as deduction from the b uted as per cash system of accounting.
ceived from Licencee - Rs. 2,50,000 - A part of its office premises to Dynacom
Pvt. Ltd. in financial year 2013 - 14. An 000 was received as Security deposit f ch is refundable and has to be paid bac ing the premises. Accordingly, the same i t liability in the balance sheet. The A this item also has no bearing for determi ome as per cash system of accounting foll
.
s Contribution to ESIC of Rs. 438 collec
This amount is collected from employee from his March salary which is paid a t date and, hence, shown as current liabi ant, therefore, humbly submits that non have any bearing with respect to the per cash system of accounting followed e above submissions, the appellant prays omputation of income as per the cash sy gularly followed by the appellant be allow
5 of the Act prescribe to follow and therefore, assessee have o uce Brokers Company Pvt.
Ltd.,
9
, 5092 & 4918/MUM/2024
tem after e to time ad Loans that the ing with basis of f the Act.
of income fit of Rs.
d 'Income earing in 015 - 16
0,36,000
provision business
Appellant
Tankers n amount from the ck at the is shown
Appellant nation of lowed by cted from for ESIC after the ility.
ne of the e income d by the s that its ystem of wed.”
w either cash or option to follow either cash or merc hybrid method of acc are reproduced as un
“[Method of a 145. (1) Incom business or p subject to th accordance w regularly emp
(2) The Centr from time t standards] to respect of any (3) Where th correctness or where the me not been regu been compute sub-section (2
in the manner
5.6 The Hon'ble S
Ambalal Mody v. S unequivocally held mandatory in nature
145, effective from maintain its books of accounting. The mixe or permitted under Se
Further, in the case
Supreme Court held accepts the method o
Marshall Produ
ITA Nos. 4917, cantile method of accounting s counting. The relevant provision nder:
accounting.
me chargeable under the head "Profits an profession" or "Income from other sourc he provisions of sub-section (2), be com with either cash or mercantile system of a ployed by the assessee.
ral Government may notify in the Officia to time [income computation and o be followed by any class of assess y class of income.
he Assessing Officer is not satisfied a r completeness of the accounts of the as ethod of accounting provided in sub-sectio ularly followed by the assessee, or incom ed in accordance with the standards notif
2)], the Assessing Officer may make an as r provided in section 144.]”
Supreme Court, in the case
S.A.L. Narayan Row, CIT (61
that Section 145 of the Inc
. Consequently, post the amend
1st April 1997, the assessee f account either on a cash or merc d system of accounting has not ection 145 of the Act after the s of McMillan & Co. (33 ITR 18
d that even when the Assessi of accounting followed by the a uce Brokers Company Pvt.
Ltd.,
10
, 5092 & 4918/MUM/2024
system and not ns of section 145
nd gains of ces" shall, mputed in accounting al Gazette disclosure sees or in about the sessee, or on (1) [has me has not fied under ssessment of Nalinikant
ITR 428), has come-tax Act is dment to Section is obligated to cantile system of been recognized aid amendment.
82), the Hon’ble ing Officer (AO) assessee, the AO is not bound by the incumbent upon the defects in the accoun that such a system profits. However, it is a different system of by the assessee mere is preferable as has Funds (P.) Ltd. [198
Income-tax Appellate
(P.) Ltd. vs Assistan
ITD 386 (DELHI), h permitted. The relev under:
ORDER
On consideration acceptable for the re 5.1 For all practic transactions, comp presentation of the a purpose of filing retu cash system of ac However, from the c mercantile system meeting its liability Marshall Produ ITA Nos. 4917, e profit figures reflected in the e AO to identify and substantia nting system adopted and record does not enable the computa s not open to the AO to interven f accounting than the one consi ely because the AO believes an a s been reiterated in CIT v. M 85] 155 ITR 442 (AP). The Del e Tribunal in the case of Amarp nt Commissioner Of Income-T held that hybrid system of ac vant finding of the Tribunal is of the material the claim made by the easons as follows: cal purposes such as recording o pliance with requirements of the C accounts before the share-holders etc. urns under the Income-tax Act, the as ccounting which was admittedly ac current year the assessee changed o of accounting for all practical purp under the Income-tax Act. This is no uce Brokers Company Pvt. Ltd., 11 , 5092 & 4918/MUM/2024 accounts. It is ate any inherent d a clear finding ation of correct e and substitute istently followed alternate system Margadarsi Chit lhi bench of the pali Mercantile Tax [1993] 45 counting is not reproduced as e assessee is not of the business Companies Act, and also for the ssessee followed ccepted in past. ver to method of oses other than ot permissible as the same is not in 'method of accountin the case of Sarangp a method of accoun purposes, that is to relate to a method income-tax. Similar Singari Bal [1945) assessee could not own business adop income-tax assessm 1159/60 of Kanga a Eighth Edition and Income-tax, Eighth in these two case contended that the effected only to com Act. But the fact rem system of accountin the statutory return that had the assess then at the most statutory report to the Companies Act is accepted that the envisaged under the system of accountin aspect and that itse to mercantile system Resolution passed purpose of Income- system of accounting 5.2 It was further assessee in case the mercantile system of be paying tax on in Marshall Produ ITA Nos. 4917, n accordance with law while interpr ng regularly employed by the assesse pur Cotton Mfg. Co. Ltd. (supra) that s nting regularly employed by the asses o say, for the purposes of his busine of making up the statutory return fo principle was laid down in the cas 13 ITR 224 (All.) (FB) where it wa for the purpose of more conveniently pt the mercantile basis and then for ment adopt the cash system of accoun and Palkhiwala's The Law and Practic also pages 4231/32 of Sampath Iy Edition. In our opinion the princ es still hold the field of assessme change from cash system to mercan mply with the amended provisions of mains that the assessee did change o ng for all practical purposes except o for Income Tax purpose. Mr. Vaish fu see continued to follow the cash syste there could have been only a qua o be obtained from the statutory and there were no other penal prov ere were no other compelling reasons e Companies Act for not switching ov ng, yet the assessee did change over lf clarifies the intention of the assesse m of accounting for all practical purpos by the Board of Directors it is sta -tax Act only, the company shall f g. r submitted that there would be h e assssees were to be taxed on incom of accounting because in that eventthe terest even on sticky or doubtful loan uce Brokers Company Pvt. Ltd., 12 , 5092 & 4918/MUM/2024 reting the words ee' it was held in section related to ssee for his own ess and did not or assessment to e of CIT v. Smt. as held that the y carrying on his r the purpose of nting. See pages ce of Income-tax, yengar's Law of ciple laid down ents. Mr. Vaish ntile system was f the Companies ver to mercantile one for preparing urther contended em of accounting alification in the auditors under visions. Even if it or penalties not ver to mercantile r in spite of this ee to change over ses though in the ated that for the follow the cash hardships to the me on the basis of assessee would ns or even where interest received is decision of the Ho Travancorev. CIT [19 held that such accr are sticky since the regard to the payme to our notice in resp as accrued about w position is found fr sufficient guide-line assess the ultimate time of raising any postponed to the e Guidance Notes, Vo Accountants of In to Section 209 of C difficulty at least o upon the fact that th debtor's account an Besides the Central appropriate Circular assessees. 5.3 It was further which shall protect t hardships to the as adopted by the tax being in consonanc books maintained assessee will not accounts, nor will it Section 44AB as oth detailed time cons Assessing Officer to the assessee and w assessee and re-con mercantile system Marshall Produ ITA Nos. 4917, deferred. Probably his submission w n'ble Supreme Court in the case of 986] 158 ITR 102 where, by majority rual of interest would be taxed even ere would be an agreement between ent of interest. First of all there is no e pect of any such amount of interest ha which the assessee is not certain of re rom the accounts filed before us. Be es in respect of such matters where collection with reasonable certainty y claim the Revenue recognition is extent of un-certainty involved (See ol. II, 2nd Edition issued by the Instit dia on pages 47-15, consequent Companies Act) and, therefore, there n the basis of the said decision wh he assessee itself had charged interes nd had taken the credit to the sus l Board of Direct Taxes also issues f rs in this regard so as to remove the submitted that such approach shou the interest of Revenue and also not c ssessee. On this aspect, in our opinio x authorities is quite correct because ce with the law, if the assessment for all purposes except for tax pu be required to maintain another s t be necessary for the assessee to h herwise, in our opinion, it would be ne suming enquiries will not be reso o find out what exactly are the amou what is the element of interest/princ nciling the same with books of account of accounting. All these undue ha uce Brokers Company Pvt. Ltd., 13 , 5092 & 4918/MUM/2024 was based on the f State Bank of decision, it was when the loans the parties with evidence brought aving been taken ecovery. No such esides there are if the ability to is lacking at the s advised to be Compendium of tute of Chartered to amendment e should not be hich was resting st by debiting the spense account. from time to time hardships of the uld be adopted, cause any undue on, the approach apart from that is based on the urpose then the set of books of have audit under cessary, besides orted to by the unts received by ipal paid by the ts maintained on ardships will be removed by the co advantage that will be need of any mod is accepted then liti for all subsequent y assessee. 5.4 While ending we behind the amendm Sachar Committee, f that certain Corpora basis in which even Company might not the Committee to accounts only on me and based on this r Companies Act had reads as under : (3) For the purposes shall not be deeme therein:- (a) if there are not k fair view of the sta case may be and to (b) if such books a double entry system Because of the am Companies to reco accrual, that is to s that is why as we by the Privy Counci further find on rea section (5) prescribes requirements of am Company the officia imprisonment and/o Marshall Produ ITA Nos. 4917, ourse adopted by the Assessing Off accrue from our this decision would ification of the assessment and if the igation will come to an end not only f years. To our mind this too is a great a e would like to refer to one more aspe ment made to Section 209 of the formed for reforms in the Companies ate Bodies maintained all or certain a nt a true and fair picture of the state always be reflected and, therefore, it make it obligatory on all Compan ercantile system of accounting (Para 8 recommendation Sub-section (3) to Se d been amended. The newly inserted s of Sub-sections (1) and (2) proper b ed to be kept with respect to the m kept such books as are necessary to ate of affairs of the company or bran explain its transactions; and are not kept on accrual basis and a m of accounting. mendment now it is obligatory on the rd its business transactions only o say, method of mercantile system of have stated earlier the judicial prin il and Allahabad High Court is directl ading Section 209 of the Companies s for compulsory compliance by the Co mended section and in case of wilful als mentioned in Sub-section (6) are p or fine. Therefore, the submission of M uce Brokers Company Pvt. Ltd., 14 , 5092 & 4918/MUM/2024 fficer. Immediate be there will not Tribunal's Order for this year but advantage to the ect, the intention Companies Act. s Act. had found accounts on cash of affairs of the t was desired by nies to maintain 8.6 of the Report) ection 209 of the d Sub-section (3) books of account matters specified give a true and nch office, as the according to the e part of all the on the basis of f accounting and nciple laid down ly applicable. We s Act that Sub- ompany with the ll default by the punishable with Mr. Vaish that the company could inv auditors if it had no incorrect. 5.5 The decision in the case of the Reve para materia with power but in the co Officer to examine i the assessee. In th Officer examined th the basis of decisi referred to earlier a method had been re and gains could a decision in the cas that Section 13 of accept a balance-sh books of accounts b the method of accou the decision in the c the case of Revenue chosen the mercanti was not open to accounting year to c be by mutual conse Income-tax purposes to which consent i Departmental Repre Cuttack Bench of th (supra) where it was regularly one metho method of account controvert this princ was not applicable Haryana High Cour into service was tota maintained books o the decree passed b and it was held tha assessee. But such different. Marshall Produ ITA Nos. 4917, vite only qualification in the report ot changed over to mercantile system the case of McMillan & Co. (supra) enue because it was held that Section Section 145 does not confer a me ontext it imposed a statutory duty o in every case the method of accounti his case we have already stated tha e method of accounting employed by on of the Privy Council and Allaha nd the Assessing Officer also found t egularly employed and he further ag appropriately be deduced therefrom e of A. Krishnaswami Mudaliar (sup the Old Act did not compel the Asse heet of cash receipts and out-going pr but he had to compute the income in unting regularly employed by the ass case of Shiv Prasad Ram Sahai (supr e. It was held therein that if the ass ile system and had regularly employe him unilaterally at any time dur change that system because the vari ent. In this case as we have stated e s, the assessee changed the system of is accorded by the Assessing Offic esentative had placed reliance on he Tribunal in the case of Prajatantra s held that the assessee was prohibite od of accounting for his own purpose ting for Income-tax purposes. Mr. ciple by showing how the decision of e to the facts of the case. Decision rt in case of Salig Ram Kanhaya Lal ally on different point. In that case th on accrual method had received decre by Lower Court was subject matter o at the amount could not be said to hav h is not the case here. The controv uce Brokers Company Pvt. Ltd., 15 , 5092 & 4918/MUM/2024 of the statutory of accounting, is in fact supports n 13 which is in ere discretionary n the Assessing ing employed by at the Assessing the assessee on abad High Court that the changed greed that profits m. Similarly the pra) it was held essing Officer to repared from the accordance with sessee. Similarly ra) also supports sessee had once ed that system it ring subsequent iation could only earlier except for f accounting and cer. The learned the decision of a Prachar Samiti ed from adopting and yet another Vaish did not of Cuttack Bench n of Punjab and (supra) pressed he assessee who etal amount, but of further appeal ve accrued to the versy is entirely
In the result the a 5.7 In view of the f when an assessee pa partly mercantile met liable to be rejected deduce the correct Revenue's contentio brokerage or interes assessee or not ne circumstances of the finding of the ld CIT(A officer for proper veri of brokerage income Officer may issue computation of incom The ground Nos. 1 a for statistical purpos alternative ground an as the ground Nos. 1 AO, therefore, the gr dismissed. 6. The ground No addition of Rs.2,97,7 the purpose of sectio Marshall Produ ITA Nos. 4917, appeal is dismissed. foregoing judicial precedents, it artly follows the cash system of thod, the books of accounts of t and it is difficult for the Asse income for tax purpose. on that the entirety of cash st income has been properly d eed also merits consideration e case, we feel it appropriate t A) and restore the matter back t ification of the profit from the b and interest income. If required commission to a tax Audit me following the methods allow and 2 of the appeal of the asses ses. . The ground No. 3 of the a nd same is not required to be ad 1 and 2 have already been resto round No. 3 is being infructuou o. 4 of the appeal of the ass 71,374/- made by the AO to the on 115JB of the Act. The Ld. C uce Brokers Company Pvt. Ltd., 16 , 5092 & 4918/MUM/2024 t is evident that accounting and the assessee are essing officer to Therefore, the h receipts from declared by the . In facts and to set aside the to the Assessing business activity d, the Assessing tor for correct wed as per law. ssee are allowed appeal being an djudicated upon ored back to the us and same is sessee relate to e book profit for CIT(A) has noted the book profit was and therefore, addit before us, the Ld. C profit for the purpose been worked out on followed under the C by the AO amounts to 6.1 We have heard th examined the mate submitted a copy of mercantile system o page 41 of the Pape before tax has been the return of income Book, along with th calculation at paper income under Secti declared at ₹25,28,55 basis of profit determ The learned counsel return of income di mercantile system populated the book the return of inco Marshall Produ ITA Nos. 4917, offered as per the cash system tion made by the AO was jus Counsel for the assessee subm e of provisions of section 115JB the basis of mercantile system ompanies Act, and therefore the o double addition. he rival submissions of the parti erial placed on record. The f the financial statement prep f accounting, which is availab er Book. In this financial statem reported as ₹28,32,84,743/-. e, available at pages 12 and 1 he schedule of Minimum Altern book page 36, it is noted that t ion 115JB of the Income-tax 5,778/-. This figure has been c mined under the ‘cash method for the assessee submitted bef id not accept the figure deriv of accounting and instead profit figure from other colum ome. Consequently, the asses uce Brokers Company Pvt. Ltd., 17 , 5092 & 4918/MUM/2024 m of accounting stified. Whereas mitted that book of the Act, has m of accounting e addition made ies and carefully assessee has ared under the ble on record at ment, the profit Upon reviewing 15 of the Paper nate Tax (MAT) he deemed total Act has been omputed on the d’ of accounting. fore us that the ved as per the d automatically mns/schedule of ssee separately declared the income with the books prepa as per the Companie been submitted befor foregoing, we deem it file of the Assessing shall examine wheth has declared income based on the books o The assessee is di evidence to support 115JB of the Act wa accounting, in comp Act. The Assessing decide the matter in appeal is accordingly 7. The grounds No building premises a assessee is agitated Assessing Officer. In deemed notional ren Andheri building add the assessee is aggrie Marshall Produ ITA Nos. 4917, under Section 115JB of the Act ared under the mercantile system es Act. However, no corroborati re us to substantiate this claim t appropriate to remand this ma g Officer for verification. The A her, in the return of income file under the MAT provisions, i.e., of account prepared under the rected to furnish all relevan its contention that the income as computed as per the merca pliance with the provisions of Officer shall consider these d accordance with law. The grou y allowed for statistical purposes o. 5 to 7 of the appeal of the as at Andheri, Mumbai. In grou with the 60% depreciation dis ground No. 6, the assessee is a ntal income in respect of 60% ded by the Assessing Officer. In eved with the addition of Rs.19,0 uce Brokers Company Pvt. Ltd., 18 , 5092 & 4918/MUM/2024 t, in accordance m of accounting ive evidence has m. In view of the atter back to the ssessing Officer ed, the assessee the book profit, Companies Act. nt documentary e under Section antile system of the Companies documents and und No. 4 of the s. ssessee relate to und No. 5, the sallowed by the agitated with the % portion of the n ground No. 7, 000/- in respect of society charges an premises at Mumbai. 7.1 The facts in bri had acquired a comm Andheri Kurla Road contention of the ass not required for the o a part of premises income from the sam house property’. Th depreciation on the l not been disputed by the balance 60% of t possession was not p depreciation on the s Assessing Officer rel assessment year 20 denied the depreciat CIT(A), the assesse 19.12.2019, for asse observed that assess 60% of the asset consideration, there Marshall Produ ITA Nos. 4917, nd property taxes in respect of A . ief qua the issue in dispute ar mercial property admeasuring 37 for Rs.7,66,75,000/- on 21.05 sessee that as the whole of the own business, the management on rent to minimize ideal co me was offered under the hea he Assessing Officer disallowed let out portion i.e. 40% of the a y the assessee. The Assessing O the property which remained in put to use for its business pur same could not be availed by th lied on the order of the Asses 014-15, where the Ld. Assessi tion on the ‘Andheri building’ . ee relied on the order of th ssment year 2014-15. However see had not demonstrated that was being put to use in t efore, the depreciation on 6 uce Brokers Company Pvt. Ltd., 19 , 5092 & 4918/MUM/2024 Andheri building re that assessee 745.20 sq. ft. At 5.2013. It is the e premises were t decided to give osts. The rental ad ‘income from d the claim of area, which has Officer held that n the assessee’s rpose, therefore, he assessee. The ssing Officer in ing Officer had . Before the Ld. he ITAT dated r, the Ld. CIT(A) t the remaining he year under 60% portion of building was not allo reproduced as under “6.15 | have a relied on findin has not given contested by th out if such find the assessmen issue already a not give any fin AO to verify an 6.16 The appe is being put to addition carried 7.2 We have heard carefully perused th adjudication before u used by the asses assessment year un reliance on the decisi for the preceding ass has argued that, in t Tax (Appeals) [CIT(A)] to verify whether 60 verification was not the CIT(A)’s order and the CIT(A) had verifie our considered view, the year under cons Marshall Produ ITA Nos. 4917, owable. The relevant finding of t : also perused the order of ITAT and found that ng of CIT (A) that the asset is being put to use n any finding towards asset being put to he appellant. Stepping back into CIT (a) ord ding has been given by CIT(A) or not, it is ob nt order for Ay 2016-17 the AO has dealt at para no.6.4.1. It is observed that Cit (a) as ndings that asset is being put to use, he had nd allow depreciation. llant has not proved that remaining 60% od o use therefore depreciation is not allowable d out by the Ld.AO is being upheld.” the rival submissions of the p he material on record. The us is whether 60% of the Andh ssee for its business purpos nder consideration. The asses ion of the Income Tax Appellate sessment year 2014-15. Howev that year, the Learned Commiss ] had merely directed the Assess 0% of the building was put to conclusively carried out while d the ITAT, therefore, erroneous ed the use of the 60% portion of whether 60% of the building w ideration is a factual matter re uce Brokers Company Pvt. Ltd., 20 , 5092 & 4918/MUM/2024 the Ld. CIT(A) is ITAT has and ITAT o use as der to find bserved in with this s well has direct eth the asset e and the parties and have sole issue for heri building was ses during the see has placed e Tribunal (ITAT) ver, the Revenue sioner of Income sing Officer (AO) use, and such giving effect to sly recorded that f the building. In was put to use in equiring specific verification. The det whether it was used matter of record, and the relevant assessm remand this issue t verification. The as evidence to substant business purposes evidence may include the premises, the na said building, and an is also at liberty Additionally, the asse records of compute brokerage business evidence presented a the law. The groun accordingly allowed f 8. The ground No notional rental inco premises. Since the the building was use has been restored ba ground no. 5 of the Marshall Produ ITA Nos. 4917, termination of its use cannot d in the preceding assessment d it is essential to verify the ac ment year. Accordingly, we find i to the file of the Assessing O sessee is directed to provide tiate that 60% of the building w during the year under cons e details of brokerage activities ames and roles of employees w ny confirmations from those emp to examine such employees essee may submit supporting ev er installations or other item at the premises. The AO sh and adjudicate the matter in a nd No. 5 of the appeal of t for statistical purposes. o. 6 is in respect of addition ome in respect of 60% of the issue depends on whether the ed for the business of the assess ack to the Assessing Officer, wh appeal, therefore, this issue uce Brokers Company Pvt. Ltd., 21 , 5092 & 4918/MUM/2024 rest solely on year. This is a ctual use during it appropriate to Officer for fresh e all necessary was used for its sideration. This conducted from working from the ployees. The AO , if necessary. vidence such as ms used in the all consider all accordance with the assessee is for the deemed e Andheri office 60% portion of see, which issue hile adjudicating is also restored back to the file of the the documentary ev that building was use 6 of the appeal of the purposes 8.1 The ground No. of rental income. The income following the Rs.19,000/-, though received in subseque year as income und While declaring the property’ the assesse receivable in respect ‘Mercantile’ accounti income under the profession’ or ‘incom purpose of declarin property’. Therefore receipt of Rs.19,000/ we reject the content made as that inco However, if the asse may file for rectifica Marshall Produ ITA Nos. 4917, e Assessing Officer for deciding vidence furnished by the asses ed for the purpose of business. e assessee is accordingly allowe 7 relates to addition of Rs.19,0 e assessee declared the receipt e cash accounting system and pertaining to rental income for ent year, so it was declared in der the head of ‘income form h income under the head ‘inco ee is required to declare the inc t of property. The option of foll ing to the assessee is availab head ‘profit and gains of th me from other sources’ only a ng income under the ‘Incom e, the assessee was required /- in the year under consideratio tion of the assessee that no add ome was declared in the su essee accepted this finding, the ation of income under house uce Brokers Company Pvt. Ltd., 22 , 5092 & 4918/MUM/2024 g on the basis of ssee to support The ground No. ed for statistical 000/- in respect from the rental the amount of the year, it was the subsequent house property’. me from house come received or lowing ‘Cash’ or le for declaring he business or and not for the me form house to declared the on. Accordingly, dition should be ubsequent year. en the assessee property in the subsequent year. Th rejected. 8.2 The ground No paid by the assessee AO disallowed Rs. excess property tax d office’. Further, the A respect of property assessee that propert assessment proceedi that amount of Rs. 3 of but inadvertently c 6.34 of impugned ord evidence in support o 8.3 We have heard r relevant material o recorded that such been produced before been filed. Therefor back to the file of th assessee to file copie which deduction has Marshall Produ ITA Nos. 4917, he ground No. 7 of the appea . 8 relates to society charge an e at office premises Mumbai an 31,105(= Rs. 1,94,825- Rs. 1 deduction claimed in respect of AO disallowed entire claim of tax for ‘Delhi office’ as again ty tax bill of Rs. 70,557/- was p ngs. Before the ld CIT(A) the a 1,105/- was actually society ch claimed as property tax. The Ld der has recorded that the asses of its claim. rival submission of the parties a n record. Both the lower au bills of society charges and re e them. Before us also no such re, we feel it appropriate to re he Assessing Officer with the es of bills / receipts for the ex s been claimed for verification b uce Brokers Company Pvt. Ltd., 23 , 5092 & 4918/MUM/2024 al is accordingly nd property tax nd Delhi. The ld 1,63,710) being f ‘Nariman Point Ts. 72,749/- in st claim of the presented during ssessee claimed harges in respect d. CIT(A) in para ssee failed to file and perused the uthorities have eceipt have not h evidences have store this issue direction to the xact amount for by the Assessing
Officer. The ground statistical purposes.
9. The ground No business promotion rejected the contentio gold bangle (Rs. 84,1
mobile phone instru incurred for the purp
Ld. CIT(A) is reprodu
“6.36 In the Rs.9,90,222/-
6.37 On perus
Tanisha pertain
. Further the Rs.8,99,143/-
6.38 The appe
Tanishq was g visited out De business"
6.39 Further amounting to R
But on perusal one of the bill a a good 7 month
6.40 The conte be acceptable.
The appellant these expense pertinent to no common parla
Having regard the explanatio incurred. The a Marshall Produ
ITA Nos. 4917,
No. 8 of the appeal is accord o. 9 of the appeal relate to expenses of Rs.1,51,740/-. The on of the assessee that said exp
66/-) to wife of one of the custo uments ( Rs. 67,574/-) to cu pose of the assessee. The relevan ced as under:
P&L A/c. the appellant has claimed exp under the head 'Trade Expenses'.
sal of the same, it is seen that one invoice i ns to purchase of One Gold Bangle worth Rs.
appellant had furnished bills to the e out of the expenditure of Rs.9,66,717l-.
ellant contested that "Gold Bangle purcha given as a gift to the wife of foreign princ elhi Office for business meet regarding c the appellant has also submitted anothe
Rs.67,574/- in respect of purchase of mobile l of the bills for the purchase of mobiles, it is amounting to Rs.33,000/- was issued on 07/
hs prior to Diwali in the year 2015. ention of the appellant are considered but not has not provided any explanation towards es. In case of business promotion expen ote that it is a very wide terminology being nce and it could comprise of varieties of e to the nature of expenses it is imperative t on by the appellant that why such expe appellant has also not filed the details of the uce Brokers Company Pvt.
Ltd.,
24
, 5092 & 4918/MUM/2024
ding allowed for disallowance of e Ld. CIT(A) has penses on gift of omer and gift of ustomers, were nt finding of the penses of issued by 84, 166/- extent of ased from cipal who chartering er 2 bills e phones.
seen that 04/2015, t found to nature of nse, it is g used in expenses.
to provide enses are person to whom search associated with 6.41 In view of appellant has underlined exp appropriate do proved that ho carried out by discharge its p incurred and h expenses as bu
Ld. AO is found
6.42 According based on inform
9.1 We have heard the relevant materia asked the assessee t were distributed , bu party to whom gold distributed by the a the assessee. If the the persons to whom the assessee then s promotion expenses address of those per cannot be accepted on a statement by th to restore this issue with the direction
Marshall Produ
ITA Nos. 4917, expensive items are distributed and how h the business of the appellant.
of the above, I am of the considerate opinion not provided proper justification for incu xpenses and the expenses are not supp ocumentary evidences. Further, the appellan w underlined expenses have nexus with the y the appellant. The appellant has failed g primary owners to prove genuineness of has also failed to establish the admissibilit usiness expenditure. Therefore, the addition d to be correct and the same is liable to be up gly, Ground 7 of the appeal is disposed on m mation/documents available on records.”
rival submissions of the parti al on record. The lower authori to provide detail of persons to ut the assessee did not disclose bangle and the mobile phones assessee and whether same we assessee succeeds, in establis m those items were distributed same can be treated as part o but unless the assessee gi rsons subject to verification by as incurred for the business p he assessee. Accordingly, we fee also back to the file of the A to assessee to provide comp uce Brokers Company Pvt.
Ltd.,
25
, 5092 & 4918/MUM/2024
they are n that the urring the ported by nt has not business grossly to expenses ty of said made by held.
merits and ies and perused ities specifically expensive items the name of the s were allegedly ere customer of shing that same are customer of of the business ives name and y the AO, same purposes merely el it appropriate
Assessing Officer lete name and address and PAN nu been distributed.
10. Now, we take u year 2017-18. The g as under:
1. The CIT(A) depreciation o premises were CIT(A) further e the block of ass year, depreciat
2. The CIT(A) e society charges
2,947 incurred premises thoug for the purpose
3. The CIT(A) e income of Rs. 2
the Andheri o premises were 4. The CIT(A) e expenses of R
Rs.10,38,490
business.
11. The ground No.
ground No. 5 of the 2016-17. Accordingl mutandis. The groun purposes. The groun
8 of the appeal of th therefore, same is al
Marshall Produ
ITA Nos. 4917, umbers of the persons to whom up the appeal of the assessee grounds raised by the assessee
) erred in not upholding the appellant's n the office premises at Andheri to the used for the purposes of the appellant's bus erred in not appreciating that once the asset h sets on which depreciation has been allowed tion cannot be denied in the subsequent years rred in not deleting the disallowance made by s of Rs. 2,20,208 and office furniture expen d by the Appellant in respect of its And gh the said office premises were used by the e of its business.
rred in upholding the addition of deemed noti
26,94,240 made by the AO in respect of 60
office premises without appreciating that used by the Appellant for the purposes of its erred in upholding the disallowance of busine
Rs. 6,93,164 and Diwali and New year ex incurred by the Appellant for the purpo
. 1 raised in the present appea e appeal of the assessee for a ly, the issue in dispute is d nd No. 1 is accordingly allowe d No. 2 of the appeal is identica he assessee for assessment yea lso adjudicated mutatis mutand uce Brokers Company Pvt.
Ltd.,
26
, 5092 & 4918/MUM/2024
m such gifts had for assessment are reproduced claim for extent the siness. The has entered d in the first s.
y the AO of nses of Rs.
dheri office e Appellant ional rental
0 percent of t the said business.
ess meeting xpenses of oses of its al is identical to assessment year decided mutatis ed for statistical al to ground No.
ar 2016-17 and dis and allowed for statistical purpo assessee is identical year 2016-17 and th allowed for statistica the assessee is iden assessee for assess decided mutatis muta
12. Now, we take u year 2017-18. The g as under:
1. Whether on law, the Ld.CIT incentive paym without conside
5% of the net p
Section 40A(2/
Company's Act
2. Whether on law, the Ld.
28,53,602/-as that the subj agreement.
12.1 The issue in di relate to salary/ince been disallowed by then the market valu as under:
“6.25 The cont amount paid b
Marshall Produ
ITA Nos. 4917, oses. The ground No. 3 of the to ground No. 6 of the appeal erefore, same is decided mutati al purposes. The ground No. 4
ntical to ground No. 9 of the ment year 2016-17 and ther andis and allowed for statistical up the appeal of the Revenue grounds raised by the Revenue the facts and in the circumstances of the c
T(A) is right in deleting the addition made on t ment to the director to the extend Rs.2,2
ering the fact that the subject law payment is profit of the company which contravens the pr
/b) of the i. T. Act, 1961C/T(A) r.w.s. 194
t, 2013. the facts and in the circumstances of the c
CIT(A) is right in deleting the addition ma incentive to three persons without consideri ject payment of incentive is not governe ispute raised in ground Nos.
entive payments to related per the Assessing Officer holding ue, whereas the Ld. CIT(A) has de tention of the appellant is found to be accep y the appellant constitutes income for the rec uce Brokers Company Pvt.
Ltd.,
27
, 5092 & 4918/MUM/2024
e appeal of the for assessment is mutandis and of the appeal of e appeal of the refore, same is l purposes.
for assessment are reproduced case and in the issue of 27,48,292/- s more than rovisions of 4(1) of the case and in ade of Rs.
ing the fact ed by any 1 of the appeal rson which has to be excessive eleted observing ptable. The cipient and the recipient is There is no rev the Ld.AO has arrangement b settled position businessman a 12.2 Similarly, rega persons other than r deleted by the ld CIT(
“6.30 The cont acceptable. Th and are in the that the appell disallowed the 12.3 We have consid perused the relevant dispute are that t remuneration of Rs
2,51,37,912/-. Accor was excessive as co explained that busine
Trehan is one of th working since 1980
2005. Mr Trehan alre
AO disallowed the in company Act, does n profit, therefore it wa the amount prescrib amount of Rs. 2,2
Marshall Produ
ITA Nos. 4917, s also taxable at same rate that of appellant venue leakage which is observed. It is also not provided any adverse comment on the between the appellant and its employee. It n that the assessing officer cannot step into th and take calls at business arrangements.”
arding disallowance of salar elative amounting to Rs.28,53,
(A), observing as under:
tention of the appellant is considered and f he underline payments are made to non rel accordance of contractual terms. The Ld.AO lant has not filed the copy of contract and th payments.”
dered the rival submission of material on record. The facts q the Director Mr Ashok Tre s. 3,14,37,344/- including in rding to the AO salary/incentiv ompared to fair market value ess of the assessee is of ship ch he best chartering broker of and hence was promoted as eady paid tax on the salary and centive amount for the reason t not permit incentive more than as excessive and he restricted bed as per company Act and h
7,48,292/- was disallowed in uce Brokers Company Pvt.
Ltd.,
28
, 5092 & 4918/MUM/2024
t company.
found that contractual ts also the he shoes of ry/incentive to ,602/- has been found to be lated party
O contested hus he had the parties and qua the issue in han was paid ncentive of Rs.
ve to Sh Trehan e. The assessee hartering and Mr the company , s director w.e.f.
d incentive. The that section 197
n 5 % of the net the incentive to held the balance nvoking section 40A(2)(b) of the Act addition observing as “6.24 The a between Mr A clearly states incentives of 1
6.25 The cont
The amount p recipient and appellant com observed. It is adverse comm appellant and the assessin businessman
6.26 In view o the addition c being deleted
12.4 We have heard material on record.
Ashok Trehan is adjudicated in favou
7177/Mum/2017 fo
Tribunal(supra) has High Court in the ca
(supra). The Hon’ble that when the payme concerned is subjecte evasion, hence no di of the Tribunal is rep
Marshall Produ
ITA Nos. 4917,
. On further appeal, the ld C s under:
appellant also submitted the agreeme
Ashok Trahan and the appellant compan s that Mr Ashok Trah is entitled to b
10% on commission eared on vessel chart tention of the appellant is found to be acc paid by the appellant constitutes income the recipient is also taxable at same rat mpany. There is no revenue leakage w s also found that the Ld.AO has not provi ment on the contractual arrangement betw d its employee. Its also the settled posi ng officer cannot step into the s and take calls at business arrangements of thee above I am of the considerate opin carried out by Ld.AO is excessive and the .”
d rival submission and peruse
As far as salary/incentive to concerned, the identical iss ur of the assessee by the Tribu or assessment year 2014-15
followed the decision of the H ase of Indo South Services Tr
Bombay High Court in the sai ents in the hand of the director ed to same rate of taxation, then sallowance was called for. The produced as under:
uce Brokers Company Pvt.
Ltd.,
29
, 5092 & 4918/MUM/2024
I(A) deleted the ent copy ny, which business tered.
ceptable.
e for the te that of which is ided any ween the ition that hoes of s.
nion that e same is ed the relevant the director Sh sue has been unal in ITA No.
5, wherein the Hon’ble Bombay ravels Pvt. Ltd.
id decision held r of the assessee n there is no tax relevant finding
“19. We note i the ground tha comparing the and thus disall
We further fin
Ashok Trehan evasion. The L
06.07.1968 wh is to be made o tax evasion bu applicable to b supported by t
Indo South Ser
Co. Pvt. Ltd. ( inclined to dis upholding the o
12.5 Respectfully, fo assessee’s own case,
Ld. CIT(A) on the issu
12.6 Regarding the d amounting to Rs.28,5
the facts qua the iss employees namely S
Vijayan Balkrishan
1,77,706/-) was dis assessee failed to su
The ld CIT(A) delete demonstrated that t terms only.
12.7 We have heard after appreciation o
Marshall Produ
ITA Nos. 4917, in this case the disallowance was made by at the commission was excessive and unreas same to the incentive paid to another direc lowed 8% of the commission paid to Shri Ash nd that the rate applicable to the assessee was same and therefore there is no ques d. CIT(A) has followed the Board's circular N hich clearly stated in para No.74 that the dis only where this payment to the related party ut in the present case there is no tax evasion both the parties is same. The case of the a the ratio laid down in two decisions namely rvices Travel Pvt. Ltd. (supra) and CIT vs. V.S
(supra). Under these facts and circumstance smiss ground No.6 & 7 raised by the R order of Ld. CIT(A).”
ollowing the finding the Tribu we do not find any infirmity in ue in dispute.
disallowance of incentive to non
53,602/- raised in ground no. 2
sue in dispute are that incentiv
Sh Siddharth Trehan ( Rs. 24
(Rs. 1,77,706/-) and Mr Doug sallowed by the AO for the r ubmit agreements made with th ed the addition observing tha the payments made were as rival submission of the parties of the evidence filed before uce Brokers Company Pvt.
Ltd.,
30
, 5092 & 4918/MUM/2024
the AO on sonable by ctor @ 0.1%
hok Trehan.
e and Shri stion of tax
No.6P dated sallowance y results in as the rate assessee is y - CIT vs.
S. Dempo &
es, we are Revenue by unal (supra) in the order of the n-related person
2 of the appeal , ve paid to three
,98,190/-) : Sh glas Naikar (Rs.
reason that the hose employees.
at the assessee per contractual s. The ld CIT(A) him held that payments were mad assessee and concer been able to point ou of services by them.
infirmity in the order accordingly, we upho appeal of the Revenu
13. In the result, th statistical purposes dismissed.
Order pronoun (SUNIL KUMA
JUDICIAL M
Mumbai;
Dated: 30/01/2025
Rahul Sharma, Sr. P.S.
Copy of the Order forward
1. The Appellant
2. The Respondent.
3. CIT
4. DR, ITAT, Mumbai
5. Guard file.
////
Marshall Produ
ITA Nos. 4917, de as per the contractual term rned parties. Before us the Re ut any discrepancy or evidence o
. In such circumstances, we d r of the Ld. CIT(A) on the issue old the same. Both the ground e are accordingly dismissed.
he appeals of the assessee are al whereas the appeal of th ced in the open Court on 30/0
d/-
S
AR SINGH)
(OM PRAK
MEMBER
ACCOUNTA ded to :
BY ORDER
(Assistant Re
ITAT, Mu uce Brokers Company Pvt.
Ltd.,
31
, 5092 & 4918/MUM/2024
ms between the evenue has not of non-rendering do not find any e in dispute and Nos. 1 and 2 of llowed partly for he Revenue is 01/2025. KASH KANT)
ANT MEMBER
R, gistrar) umbai